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3 Question: Whether property had vested indefeasibly in beneficiary despite the fact trustee had disposed of property before estate fully administered. Answer: Question of fact – depends on whether trustee was acting on behalf of beneficiary at time of property disposal.

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9 MacKay TCC – looked to primary purpose of the overall series of transactions – to acquire, redevelop and hold shopping centre Good news for taxpayers – seemed to affirm The Duke FCA – have commentators over-reacted? Will the decision be appealed to SCC?

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10 Tolhoek Continuing saga of the Trafalgar software partnerships First issue was whether the the debt assumed by taxpayer was a “limited recourse amount” under Second issue – reassessed within time? Taxpayer lost at TCC and FCA Sloppy execution and implementation?

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11 Tolhoek Circular flow of funds among related parties No “bona fide” arrangements to pay interest or repay debt Taxpayer could not demonstrate that interest was paid within 60 days of year end Second issue – since debt could become LRA if 60 day period was ever missed, MNR had until debt was repaid to make the determination – therefore not statute barred

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13 Gestion Leon Gagnon Husband and wife owned Opco Opco received a bonus in the course of its business which it reported as income Individual shareholders wanted to creditor proof this bonus without current tax Opco capital amended to create High-Low shares GLG created to subscribe for them in 2000

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14 Gestion Leon Gagnon In 2001 shares were redeemed and GLG reported deemed dividend income CRA reassessed 2001 imputing shareholder benefit under 15(1) on basis issuance of share constituted a benefit “I find it hard to fathom the true reasons that led the Minister’s auditors to assess under ss. 15(1)”

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15 Cascades Complicated series of transactions to increase shareholder value of public corporation Three way merger was last step in series Taxpayer realized a capital loss on sale of shares to an intermediate company that was party to the merger CRA denied loss under 40(3.3), (3.4) and (3.5)

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16 Cascades Taxpayer said conditions for application of stop loss rules in 40(3.5)(c) did not apply, so (3.3) and (3.4) did not apply Since shares which would be the subject of the stop loss rules ceased to exist, condition not met = so taxpayer won Good discussion of 61 day bright line test

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18 QL Hotel Services Assets transferred to purchaser were intangibles and TPP Intangibles transferred first for common share TPP transferred next for special shares Taxpayer sought rectification order to separate directors resolutions to clarify

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19 QL Hotel Services Taxpayer argued that incorporator should be considered owner – rejected Court agreed that two step sale resulted in taxpayer “wholly owning” purchaser at time TPP was transferred Moral – be careful in drafting and issue a common share on organization

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20 Taylor Egregious conduct of CRA auditors (“bordering on gross negligence” and “willful blindness”) led criminal court trial judge to order costs against “the Crown” All charges ultimately dropped on eve of trial NSCA overturned trial judge order – CRA, like RCMP, is not “the Crown” So what remedy is left for aggrieved taxpayers?

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21 Lavie CRA assessed taxpayer for unreported income from cocaine sales CRA presumptions based on hearsay and circumstantial evidence Taxpayer not charged with any offences – although others were charged based on the same information CRA had CRA presumptions based on unreliable evidence and rejected Same issues arise in net worth assessments